Settlements imperil Mideast peace prospects

Israel hints at lifting restrictions on building in West Bank

RAMALLAH, West Bank - Just days after Middle East peace talks began in Washington, the first major crisis already is looming: Israel hinted Sunday it will ease restrictions on building in West Bank settlements, while the Palestinian president warned again that he'll quit the talks if Israel resumes construction.

Israel's 10-month-old slowdown on new building in settlements expires Sept. 26, leaving Prime Minister Benjamin Netanyahu with a tough choice.

If he extends the freeze, he risks breaking up his hard-line coalition. If he lifts the restrictions, he risks getting blamed for derailing negotiations and disrupting President Barack Obama's fledgling Mideast peace efforts.

The Israeli prime minister struck an unusually conciliatory tone during the Washington peace summit and again Sunday, when he briefed his Cabinet about his 2 1/2-hour meeting with Palestinian President Mahmoud Abbas in the U.S. capital.

Once a fervent opponent of Palestinian statehood, Netanyahu said Sunday he wants negotiations to succeed after 17 years of failed attempts.

"I believe that what is needed now to move the process forward is not a proliferation of negotiating teams, but decisions by leaders," he said.

Netanyahu's hawkish foreign minister, Avigdor Lieberman, dismissed the whole process Sunday. He said a peace accord "is not attainable . . . within the next generation."

Under intense U.S. pressure, Israel imposed restrictions on most West Bank settlement construction last November in a bid to bring the Palestinians back to the negotiations.

Palestinians view a continued curb on settlement construction - even if it falls short of a complete freeze - as the true test of Netanyahu's intentions.

Abbas told a group of PLO activists in Libya late Saturday that anything but an extension of the slowdown is unacceptable.

"I don't think it will remain, and we're looking for a way to ensure that this will not harm the continuation of the talks," he told Israel Army Radio.

Palestinians want a state in the West Bank, Gaza and east Jerusalem, territories Israel captured in the 1967 Six Day War. They could accept some border adjustments that would let Israel keep some of the largest settlements.